TMCnet News

True slips back into the red
[March 04, 2009]

True slips back into the red

Mar 04, 2009 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) -- True Corporation, the country's largest telecommunications conglomerate, posted a heavy loss of 3.38 billion baht in 2008, compared with 1.56 billion baht in profit a year earlier.

True chief financial officer Noppadol Dej-udom said the loss was due mainly to a foreign-exchange loss of 2.6 billion baht and the poor performance of the mobile-phone operating unit True Move due to a failed off-net tariff plan.

True reported consolidated losses of 1.58 billion baht in the fourth quarter of 2008, against a net profit of 608 million baht from the same period a year earlier. Consolidated revenue decreased 4.4 percent year-on-year to 15.198 billion baht.

Full-year consolidated revenue declined 0.6 percent to 61.26 billion baht, while consolidated loss was 3.385 billion, compared with a profit of 1.558 billion in 2007.

True Move posted a fourth-quarter net loss of 1.61 billion baht, compared with a profit of 924 million year-on-year. Revenue slipped 10.7 percent to 7.71 billion baht. True Move contributed 42 percent of total revenue and 31 percent of total earnings before interest, tax, depreciation and amortisation (EBITDA) last year.

True operates fixed-line telephones, mobile phones, pay-television, broadband internet and international internet gateway services.

Mr Noppadol admitted that True Move had been badly damaged by interconnection charges (IC) due to the failure of its marketing plan for its off-net promotional tariffs. It paid 800 million baht in IC revenue to its bigger rivals last year, compared with a gain of 200 million baht in 2007.

But he said True Move saw a sign of improvement with calling traffic back to a normal pattern since the final quarter last year.

True Move gained 2.7 million new subscribers last year, bringing its total to 14.8 million. "We expect to have a 30 percent share in the new subscriber market this year," he said.

Mr Noppadol said the group posted a profit of 62 million baht in net income from ongoing operations last year, its first ever full-year gain, compared with a loss of 1.179 billion in 2007.

Despite posting heavy losses, True president and CEO Supachai Chearavanont said the group's convergence strategy had made progress on many fronts. The number of households using multiple True products increased 22 percent to 1.9 million.

The strategy also pushed forward its online service revenue by 6 percent to 26 billion baht, driven mainly by broadband growth and new revenue streams such as international direct dialling (IDD) and international internet gateway (IIG) businesses.

Broadband revenue grew 19 percent to 5 billion baht while subscribers increased by 15 percent to 632,000. WiFi subscribers climbed from 32,000 to 109,000.

The number of TrueVisions pay-television subscribers rose by 41 percent to 1.5 million last year, with full-year revenue up 6.4 percent to 9.4 billion baht.

Mr Noppadol added that True Corp plans to spend 4 billion baht this year on expanding existing 2G network capacity, down from 5 billion last year. But it will seek a strategic foreign partner for funding its third generation (3G) mobile service.

TRUE shares closed yesterday on the SET at 1.38 baht, up five satang, in trade worth 18.9 million baht.

To see more of the Bangkok Post, or to subscribe to the newspaper, go to Copyright (c) 2009, Bangkok Post, Thailand Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

[ Back To's Homepage ]